Report Prepared by: Joe Cardoso, P.L.S., City Surveyor, Engineering Department
Title
SUBJECT: Award Bid to Diede Construction Inc., a Stock Corporation for Project CP230052 - Stephen Leonard Building Rehabilitation the Amount of $1,515,720
REPORT IN BRIEF
Considers awarding a Construction Contract to Diede Construction Inc. in the amount of $1,515,720 for the rehabilitation of Stephen Leonard Building located at 640 T Street.
RECOMMENDATION
City Council - Adopt a motion:
A. Awarding the Stephen Leonard Building Rehab, Project CP230052 to Diede Construction, Inc., in the amount of $1,515,720; and,
B. Approving an increase to cost recovery revenue in Fund 5000-Parks and Community Services CIP in the amount of $1,781,840, appropriating the same in Fund 5000-Parks and Community Services CIP Project Number CP230052-Stephen Leonard Building Repairs and allowing the use of pooled cash until reimbursement is received from the insurance company; and,
C. Authorizing the City Manager to execute the necessary documents and to approve change orders not to exceed 20% of the total contract; and,
D. Authorizing the Finance Officer to make necessary budget adjustments.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, subject to conditions other than recommended by staff (identify specific findings and/or conditions amended to be addressed in the motion); or,
3. Deny; or,
4. Refer to staff for reconsideration of specific items (specific items to be addressed in the motion); or,
5. Continue to a future meeting (date and time to be specified in the motion).
AUTHORITY
Charter of the City of Merced, Article XI, Section 1109 - Contracts on Public Works.
Merced Municipal Code Chapter 3.04, Article IV - Public Works Contracts.
CITY COUNCIL PRIORITIES
As provided for in the 2024-25 Adopted Budget.
DISCUSSION
The Stephen Leonard Park Community Center, located at 640 T Street, Merced, was severely damaged by a fire on the evening of May 17, 2022. The damage was extensive, and a claim was submitted to our property insurance broker, Alliant (APIP). Alliant submitted the claim to McLarens Property Insurance Company to contract hazardous material clean up, work with the City. Partial payments totaling $664,300.40 have been received and accepted by City.
Under the direction of City staff, Teter, LLP, in collaboration with North Star Engineering Group, Inc., prepared plans and specifications for the structural repairs. On November 21, 2022, City Council awarded the construction contract to Harris Builders, Inc., in the amount of $252,550 for the structural and roof repairs to prevent future damages from the weather and future deterioration. Contract Change Order No. 1 was subsequently approved in the amount of $22,322.32 for additional work to the roof section. This portion of work was completed on June 7, 2023.
As requested by McLarens Property Insurance for tracking of each insurance claim, the project was split by multiple categories due to the fire damage, vandalism damage, code upgrades, and owner betterments. The following is a breakdown of each category:
• Fire Damage - ($782,151.66) is for the repair of the fire damage minus the $274,872.32 in repairs Harris Builders performed in November 2022. Which include demolition, sealed concrete, roofing, painting, HVAC, and electrical.
• Vandalism Damage - ($245,991.18) During the design phase of the project, the building suffered a significant amount of vandalism damage, such as removal of electrical wiring, plumbing, fixtures, windows, drywall, doors, and some structural damages.
• Code Upgrades - ($392,489.18) is for any code upgrades to the building such as fire sprinklers, electrical, plumbing, HVAC, fixtures, painting, restrooms, and underground utilities such as gas, electrical, and plumbing.
• Owner Betterments - ($95,087.98) is for the main switch board, fire sprinklers outside of the building, upgrade the roof not damaged by the fire, and some rough carpentry. The main switch board will be inspected during construction to determine the amount of damage it sustained and staff will seek reimbursement by our insurance company for the replacement costs.
On May 5, 2024, Council allocated $150,000 from American Rescue Plan Act (ARPA) for any additional cost for the project rehab that was not being covered by the insurance company such as the owner betterments.
Staff prepared plans and specifications, and the project was advertised for bids. Bids were opened on July 23, 2024, with the following results:
1. Diede Construction, Inc., Woodbridge, CA $ 1,515,720.00
2. Bobo Construction, Inc., Elk Grove, CA $ 1,628,096.00
The Engineer’s estimate for construction was $950,000.
The following is the proposed budget for the project:
|
Construction |
$ 1,515,720.00 |
|
Contingency (20%) |
$ 303,144.00 |
|
Engineering |
$ 81,572.00 |
|
Testing |
$ 20,000.00 |
|
Inspection |
$ 50,000.00 |
|
TOTAL: |
$1,970,436.00 |
The available budget within the project currently is $188,596, which is comprised of $150,000 of ARPA, and $38,596 balance of the insurance claim received to date in Fund 5000-Parks and Community Services CIP. Staff is requesting an increase to the budget of $1,781,840 to cover the project budget of $1,970,436.
Staff will submit regular invoices to the insurance company for reimbursement.
IMPACT ON CITY RESOURCES
Staff is requesting increasing revenue in Fund 5000-Parks and Community Services CIP in the amount of $1,781,840 and appropriating the same to Project CP230052, and allowing the use of pooled cash until reimbursement is received from the insurance company.
With recommendation D above, staff will have authority to true-up Project CP230052 in the amount $21,976 which was received from the Insurance company in excess of the initial budget request. This will create a balance of funding available within the project of $188,596.
This budget amendment will require an affirmative vote of five council members to pass.
ATTACHMENTS
1. Bid Results
2. Construction Contract